A customer is a person who obtains a product or service from an organization or business. The customer, most times, but not all, acquires this product or service through monetary means. Knowing who your customer is, is crucial in producing the expected business outcomes and providing the experience and service the customer is expecting. So you must ask the question, "Who is the customer?"
The answer is not everybody. But the fact is, it is never everybody. There may be diverse cultural or climate characteristics, attitudinal characteristics, behavioral characteristics. They may share a lot of similar demographics, similar buying patterns and such. Culturally, behaviorally, they are also very different. These facts impact your business, if not properly assessing your customer.
Statistics show the following:
- A 5% increase in customer retention increases profits up to 125%
- Probability of selling to an existing customer: 60-70%, Probability of selling to a new one: 5-20%
- A 2% increase in customer retention has the same effect as decreasing costs by 10%
- It costs 6-7 times more to acquire a new customer than to retain an existing one
The first step in finding out and realizing who your business is servicing, is to raise the following questions:
- Who is our customer- the actual customer and the potential customer?
- Where is he?
- How does he buy?
- How can he be reached?
Once you answer these questions you will know what business you are actually in and set better objectives on delivering the service your customer wants.
"The purpose of a business is to create a customer who creates customers"-Shiv Singh
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